{"id":6199,"date":"2016-03-08T13:00:00","date_gmt":"2016-03-08T13:00:00","guid":{"rendered":"https:\/\/www.portal.solar.com\/learn\/solarcity-pulls-plug-on-mypower\/"},"modified":"2019-11-13T22:37:58","modified_gmt":"2019-11-13T22:37:58","slug":"solarcity-pulls-plug-on-mypower","status":"publish","type":"post","link":"https:\/\/www.solar.com\/learn\/solarcity-pulls-plug-on-mypower\/","title":{"rendered":"SolarCity Pulls Plug on MyPower"},"content":{"rendered":"

Several\u00a0weeks ago, SolarCity announced that they would be abandoning their flagship solar loan product, MyPower. \u00a0Considering <\/span>the product was a pretty poor deal<\/span><\/a> for their customers, this announcement should be caused to celebrate. \u00a0However, such a celebration might be premature. \u00a0Though SolarCity did announce the development of a newly revamped loan product, it seems unlikely that it will translate to any significant benefit for prospective customers. \u00a0Let’s take a look at why this is the case.<\/span><\/p>\n

MyPower Was a Tough Sell<\/strong><\/p>\n

In 2014 when MyPower was initially rolled out, SolarCity anticipated that 50% of their company’s solar installs would be financed by solar loans by the end of the next year. \u00a0However, when that time eventually came, loans only covered a meager 13% of all installs. \u00a0MyPower didn’t perform as well as anticipated due to several obstacles that deterred its widespread acceptance. \u00a0<\/span><\/p>\n

First and most significantly was the fact that many potential customers couldn’t qualify for the 30% Investment Tax Credit that MyPower was designed around. \u00a0Even if customers did qualify, there was the matter of the highly undesirable 2.9% annual escalator to contend with. \u00a0Last of all was MyPower’s, entirely nonsensical 30-year loan term. \u00a0Generally, loans have a term of about 10 years, with the more iffy loans carrying a term of 20. \u00a0Add the outcomes of recent net metering rulings, with even more pro-solar states such as California only grandfathering net metering for 20 years, and it becomes clear that the 30-year loan term was wildly off the mark. \u00a0When considering these factors, it’s almost surprising that MyPower sold as well as it did. \u00a0<\/span><\/p>\n

Not a Good Deal for Anybody<\/strong><\/p>\n

Even if MyPower was widely adopted, that may not have been good news for SolarCity. \u00a0In their analysis of the product, Seeking Alpha called MyPower “<\/span>a proven value destroyer<\/span><\/a> [that] must be discontinued sooner than later”. \u00a0According to them, this is because MyPower is riddled with even more flaws than the PPAs that it was meant to replace. \u00a0Chief among these flaws is the fact that SolarCity sells its MyPower systems for a minute up-front cost. When combined with the fact that it is easy for customers to keep their federal tax credit rather than surrendering it as intended to SolarCity, it becomes highly possible that SolarCity could lose big with MyPower. \u00a0<\/span><\/p>\n

SolarCity Facing Uncertainty in Changing Market<\/strong><\/p>\n

The last few months have not been kind to SolarCity. \u00a0Seeking Alpha and Investors.com have noted that the industry heavyweight has been facing diminishing growth in the face of plummeting stock value, and unfavorable net metering rulings in several key solar states. \u00a0Nevada’s PUC ruling, in particular, has hurt SolarCity, as they were forced out of the state due to a quickly evaporating solar market, leaving SolarCity hurting for cash. \u00a0<\/span><\/p>\n

Implications<\/strong><\/p>\n

Considering MyPower’s significant flaws, making it difficult to market and a questionable investment for both customers and themselves, and the increased pressure to perform provided by slowing growth and the latest net metering rulings, it’s only logical that SolarCity moves to eliminate MyPower. \u00a0The question left to us is, “What will it be replaced with?” \u00a0While we know little in regard to the specifics of what the new loan product will look like, we can venture an educated guess based on the situation SolarCity faces, and what their executives have stated. \u00a0<\/span><\/p>\n

Based on increasingly dire straits they find themselves in, as well as their own stated issues with MyPower, it seems they will do their best to make MyPower’s replacement a simple and easy sell in order to expand their pool of qualified applicants. \u00a0To ensure this, the new product certainly won’t rely on the investment tax credit that many failed to qualify for. \u00a0It will have a shorter loan term, to be more in line with industry standards of around 10 years, rather than the outrageous 30-year term that deterred so many customers from their last product. \u00a0Also potentially up for review is the unattractive 2.9% escalator, that was acknowledged as being a “mistake”. \u00a0These changes will remove the three main obstacles SolarCity faced while selling the MyPower product. \u00a0However, the changes do nothing to address the aspects of MyPower that made it such a miserable deal for their customers.<\/span><\/p>\n

In fact, it seems unlikely that SolarCity will do anything to make MyPower more financially sound. \u00a0SolarCity executives continue to allege that MyPower is the “best savings [they] can offer”, and assert that the new product will be “no better for a customer in terms of financials”. \u00a0Thus it seems that changes being implemented for MyPower’s replacement will only make the new product simpler (for SolarCity to sell). \u00a0Considering the <\/span>incredibly unfavorable financials<\/span><\/a> of the original MyPower product, we wouldn’t hold our breaths in hopes that SolarCity will put out a new loan product that will turn out to be a solid investment. \u00a0<\/span><\/strong><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Several\u00a0weeks ago, SolarCity announced that they would be abandoning their flagship solar loan product, MyPower. \u00a0Considering the product was a pretty poor deal for their customers, this announcement should be…<\/p>\n","protected":false},"author":25,"featured_media":6372,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":""},"categories":[86],"tags":[],"yoast_head":"\nSolarCity Pulls Plug on MyPower | Solar.com<\/title>\n<meta name=\"description\" content=\"SolarCity announced they would be abandoning MyPower. 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